A method of manufacturing a multilayer ceramic electronic component includes: preparing a dielectric magnetic composition including base material powder particles including BaTi2O5 or (Ba(1-x)Cax)Ti2O5 (0≤x≤0.1), the base material powder particles having surfaces coated with one or more of Mg, Mn, V, Ba, Si, Al and a rare earth metal; preparing ceramic green sheets using dielectric slurry including the dielectric magnetic composition; applying an internal electrode paste to the ceramic green sheets; preparing a green sheet laminate by stacking the ceramic green sheets to which the internal electrode paste is applied; and preparing a ceramic body including dielectric layers and a plurality of first and second internal electrodes arranged to face each other with each of the dielectric layers interposed therebetween by sintering the green sheet laminate.